The Federal Energy Regulatory Commission in December approved a settlement package that resolves all complaints regarding non-performance charges arising from Winter Storm Elliott in December 2022.
The approved settlement resulted from expedited talks requested by the PJM Interconnection in order to swiftly resolve the complaints, PJM said.
At its Dec. 19 Open Meeting, the Commission approved the settlement package between PJM and 81 other settling parties regarding non-performance charges assessed by PJM during Winter Storm Elliott.
PJM has posted an FAQ that explains some of the anticipated next steps and milestones regarding implementation of the now-approved settlement package.
Additional information can be found on the Winter Storm Elliott Information page.
The Commission’s order concludes extensive litigation arising from the loss of more than 40,000 MW of generation during Winter Storm Elliott, circumstances that required PJM to take multiple Emergency Actions on Dec. 23–24, 2022, to preserve system reliability in the PJM region, while also helping to avoid service interruptions in neighboring regions.
Under PJM’s Capacity Performance requirement, generators that receive payments through the PJM Capacity Market are subject to non-performance charges when they fail to perform when asked by PJM to run to maintain grid reliability.
During Winter Storm Elliott, generators that failed to perform were assessed significant performance charges, PJM said.
Non-performance charges paid by underperforming generators are distributed as performance payments to generators that over-perform.
The settlement results in a market-wide reduction of non-performance charge assessments from an estimated $1.8 billion to an estimated $1.25 billion, which in turn trim performance payments.
